At the end of September, the 31st edition of the Monaco Yacht Show, one of the most important trade fairs specialized in luxury vessels, opened with great pomp and circumstance. In this “bubble” cut off from the world, the Ultra high-net-worth individual (UHNWI) has never been so numerous. As an insurance specialist for these special assets, we take the opportunity of this event to lift the veil on this very specific market, which, as for most luxury segments, is cloaked in opacity when it comes to figures, growth and trends.
A market that keeps growing
What does this niche market represent numerically and concretely? According to the latest figures published by SuperYacht Times, an average of110 superyachts are built each year, which represents approximately 4 billion euros in annual revenues. These figures should be put in perspective with the number of yachts under construction per year, a figure that allows us to take the real measure of the market pulse: in 2022, 1024 superyachts are under construction, an increase of +24% compared to 2021!
©Monaco Yacht Show, Market Report 2022
To whom and to what do we owe this growth?
So the yacht economy is booming, to whom do we owe this? First and foremost, the Americans. Nearly 1/4 of the yachts in circulation belong to them, followed by the Russians, and then the French in a very small proportion.
The growth of the market is also explained by the use that these rich owners make of their property. During and after the pandemic, some of them used their luxury yachts not only for travel or during key moments of the year as a holiday “place”, but as a real place to live. For some owners, the yacht has become another second home among their real estate assets, a place to live like any other where they can spend more time (see our article on this subject: Living all year long on a Yacht ? A new reality )
In general, the luxury sector has benefited from the Covid period, and the superyacht market has not been left out of the equation… quite the contrary.
©Monaco Yacht Show, Market Report 2022©
What are the possible impacts on the market in the face of a turbulent economic and geopolitical context?
War in Ukraine, shortage of raw materials, inflation: faced with this triptych, almost no market can claim today to be free of impact. Although the collateral effect is by far not as important in the luxury world, production delays have been noted, with delivery times getting longer and longer. A trend that is as valid for superyachts as for other special goods such as watches. This year, the watch brand Richard Mille, the new official sponsor of the Monaco Yacht Show, enthusiastically pointed out the common values of the two markets, the common dialogue with similar customers, etc. It is clear that these two markets are also facing the same impacts of a context that spares no one today.
It will be interesting to see the longer term effects on the yachting market.
For Fanny Eyraud, Director of PSPI:
“The marked growth of the sector clearly shows that, whatever the economic and geopolitical context, this category of UHNWI buyers shows no sign of volatility. The reason? We see in our business, by working with them, that they are true lovers of the sea and passionate about this “strong” and powerful element, who need to spend more and more time there. The purchase therefore often has a strong emotional and symbolic impact, which explains why, even – and even more so in times of crisis – yachts still find their audience. In my opinion, neither the slowdown in orders nor inflation will reverse the trend, but the future will tell!”
We’ll be back in a few months to take stock of the superyacht market!